We have dear friends in Washington, DC, one of whom is a blogger at The Atlantic and recently posted this article:http://www.theatlantic.com/business/archive/2010/08/home-sales-plunge-in-july/61960/.
I replied this way on the actual site:
"I have to admit, Megan, I love you, but your assessment looks at numbers only, and not at quality of inventory and quality of buyers. Properties were routinely underpriced, that's what caused some bidding wars. Further, if things were overpriced, they sat on the market and sellers typically did come down. Finally, in the DC market, a stable market, there are many gainfully employed 2-working-adult purchasers, and it is my estimate there are more qualified buyers with good credit there than in many other places in the country. Real estate is local, and from just watching you and Peter's experience, it seems to me that it could have been different. And also, I feel that there were prejudgments about what the "market should be" that you might have had going in. The bottom line is, "Did you get a house you like/love at a price you can afford?" If so, congratulations. You win. Talk to me in ten years about whether or not it was a good investment. P.S. The summer is always slow. Fall and Spring are the numbers to watch."
Then, someone on my Facebook asked, "How can a person disagree about the facts?" Well, here's my answer:
"Because "facts" don't take into account the actual quality of the houses and the quality of the buyers. That's how. If a house is underpriced, it gets multiple offers in a market where there are qualified buyers. If a house is overpriced, it sits. Then we report, "Houses sold for 10% over asking." Or "Houses had to reduce their prices by 10%." Well, were they priced right to begin with? Houses have a RANGE of value, largely based on condition, neighborhood and the number of qualified buyers in a particular area. In the hotter neighborhoods, with more buyers, guess what? Prices are darn stable and properties ARE appreciating. But you make a good point--when people say the real estate market is "bad," you have to ask which side of the transaction they are on. When it's a "hot market," sellers can sell for more profit, but the houses they want to buy cost more. When the real estate reports are "dreadful," it's a GREAT time to buy (maybe sellers don't make as much profit on their sale but they buy their next house for cheaper). So, in my humble opinion as a real estate professional, the hype is just that--selective numbers to substantiate some perception. Guess what? People always want to buy and sell, and just like the stock market, you just have to pay attention to when it is a good time for you personally, in your market, to buy or sell."
Real estate is LOCAL, and how I wish Realtors would be interviewed in these stories (I frequently see Realtors being interviewed on real estate particulars such as staging or new construction condos, but rarely on the overarching market). Different markets have different trends, and frankly, the summer real estate market in Washington, DC is rarely hot.
One other note...people have different experiences buying and selling their homes also due to who they are and how they operate. Some people sail through the process, some stress out. It is a very personal experience, especially the first time, and not everyone understands how to allow their expectations to be changed by the reality of the process. We have to adjust to changes in the lending markets, too, so it's not just buyers that need to be flexible.
Journalists and readers should take into account the main purpose of buying a home, the intangibles, too. Pride of home ownership, paying yourself back, tax breaks, etc., and plan to stay there until the time is right to sell. NO ONE can predict the future, and there have been booms and busts throughout American home sales history.
"This mess" is the result of overzealous homebuyers and lenders, that is true, but don't blame the market for stabilizing. It should be GOOD news that prices aren't going up like they were a few years ago.
Comments(17)